On behalf of a friend "srs"

desperado88

I have a friend who has catalogue debt with Very £3500 to be exact and she doesn't know what to do and what i cant figure out is how she managed to get so much debt i mean she doest work and has never worked why would anyone give her credit especially on benifits.It has come to the stage were they want £200 off her benefits every month and so far hasn't missed a payment,does any body else think this is crazy.I don't know what to say to her,but my reckoning is she has to feed herself and her child first,what can they do to her as she seems to be cracking under the strain of this.
Anybody any experience of dealing with these people.?

Rebel_Cause

If she is keeping her head above water by maintaining the monthly payments that is her business.

However, their interest rate is quite high so a majority of her monthly payment is just interest and only about £10-£20 is coming off the actual balance.

I also know someone who has never worked and has a £7,000 balance on their Littlewoods account... again, that is up to them, it does not affect me because I am not financially linked to said person.

If she is cracking under the strain, they may put her on a payment plan, update her credit file saying that she is on an Arrangement To Pay for a length of time and she may have her credit facility temporarily suspended or permanently revoked, meaning she will not be able to order any more goods.

Sagz_2

I think you are asking the question the wrong way around. It's not "why would anyone give her credit", "it's why would she ever buy things she can't afford"?

Could she sell some of the goods she has bought from them to try and pay back earlier and so save paying some of the interest?

desperado88

Sagz wrote: »

I think you are asking the question the wrong way around. It's not "why would anyone give her credit", "it's why would she ever buy things she can't afford"?

Could she sell some of the goods she has bought from them to try and pay back earlier and so save paying some of the interest?

I know what you are saying but to be blunt she is not the brightest financially and i think she was caught out with their interest TBH.She suffers from depression and its a well known fact that people who suffer from it will try and mask it by trying to cheer themselves up especially with a £6500 limit like she has......seriously though would you lend someone £3500 who has never worked and has no way to repay it?

Rebel_Cause

desperado88 wrote: »

seriously though would you lend someone £3500 who has never worked and has no way to repay it?

No way, and after reading several posts on here from people wondering if they should lend friends or family I would not do it if my life depended on it. A family member asked me to lend them several thousands of pounds, all the money I had to my name, even though they have never worked, lived on credit all their lives and not currently in employment. I have not heard from them again when I gave them the answer they didn't want.

sourcrates

desperado88 wrote: »

I know what you are saying but to be blunt she is not the brightest financially and i think she was caught out with their interest TBH.She suffers from depression and its a well known fact that people who suffer from it will try and mask it by trying to cheer themselves up especially with a £6500 limit like she has......seriously though would you lend someone £3500 who has never worked and has no way to repay it?

I would assume she lied on the application, and "exaggerated" her earnings, you would not expect to be accepted, especially with that credit limit, if she had said her income was purely benefits, it also appears the catalogue failed to do sufficient affordability checks on her, but that is not uncommon in that industry.

I think she should ring stepchange for some advice, stop the £200 a month payments, which can't be affordable, and pay them £1 a week till further notice, allow stepchange to work something out for her, as otherwise it has the potential to go sour pretty quickly.

desperado88

sourcrates wrote: »

I would assume she lied on the application, and "exaggerated" her earnings, you would not expect to be accepted, especially with that credit limit, if she had said her income was purely benefits, it also appears the catalogue failed to do sufficient affordability checks on her, but that is not uncommon in that industry.

I think she should ring stepchange for some advice, stop the £200 a month payments, which can't be affordable, and pay them £1 a week till further notice, allow stepchange to work something out for her, as otherwise it has the potential to go sour pretty quickly.

Just called her sourcrates and she said she has never told them she was working just that she always paid it and they kept upping her credit limit,she still has £3000 available....they are mad.

absolutereturn

desperado88 wrote: »

I have a friend who has catalogue debt with Very £3500 to be exact and she doesn't know what to do and what i cant figure out is how she managed to get so much debt i mean she doest work and has never worked why would anyone give her credit especially on benifits.It has come to the stage were they want £200 off her benefits every month and so far hasn't missed a payment,does any body else think this is crazy.

First of all, regardless of how she managed to get into debt, they can't take money from her benefits, only the the government can make deductions from benefits for things like overpayments of benefits or tax credits or to recover magistrates' court fines. It is possible to have deductions from benefits to repay priority debts such as utility and rent arrears but they would be much lower than £200 a month.

For non-priority debts, even with a judgment (CCJ), it's not possible to get deductions from benefits so that's out of the question.

desperado88 wrote: »

I don't know what to say to her,but my reckoning is she has to feed herself and her child first,what can they do to her as she seems to be cracking under the strain of this.
Anybody any experience of dealing with these people.?

Has she defaulted on the account? If she does, she will have a default on record for six years. Priority payments such as utilities and rent or mortgage should come first. If she's on benefits she probably pays very little council tax but that's also a priority. She needs to feed herself and her family and benefits are not intended to repay debts so she'll have to default. Any idea how long she's had the catalogue account?

She can offer token payments herself without the need to go through a third party, especially if she doesn't have many other debts. It is important to get them to freeze interest. Some people are under the impression that creditors do this more easily when dealing with DMP providers but that's often not the case.

absolutereturn

desperado88 wrote: »

Just called her sourcrates and she said she has never told them she was working just that she always paid it and they kept upping her credit limit,she still has £3000 available....they are mad.

With any type of revolving credit facilities including credit cards, it's not uncommon to have your credit limit increased automatically as long as you keep up your contractual payments. It's not their duty to be asking whether you are working or not once you've got the credit and are paying for it.

absolutereturn

sourcrates wrote: »

I would assume she lied on the application, and "exaggerated" her earnings, you would not expect to be accepted, especially with that credit limit, if she had said her income was purely benefits, it also appears the catalogue failed to do sufficient affordability checks on her, but that is not uncommon in that industry.

Wow, that's some assumption! She may have had the account for years for all we know. Those are quite serious accusations you are making.

northerner999

Stepchange. Stepchange. Stepchange.

There are ways to deal with the debt, and as has been pointed out absolutely the best way of getting started down that road is by speaking to someone like Stepchange who can help your friend get a grip of things. There is little point wasting time now on how your friend racked up the debt, but on finding ways of dealing with it.